Reasons to Expect Inflation

7/23/2013 10:58AM

With inflation across much of the developed world stuck at well below 2%, economists are starting to worry about deflation. But there are some reasons why inflation, rather than deflation, is more likely. Alen Mattich joins MoneyBeat. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... ay ay mm mm ... the U S to Europe to China inflation pressures to become sole Mio somewhat worried that the inflation might be coming ... Alan manages here with reasons why inflation ... not deflation ... might be the next thing to hit the global economy Alan ... this of this poster wrote this morning on MoneyBeat blogged ... done really well Ms really cut costs and lightning in a bottle one might say ... twelve ... give ... deflationary forces have to have been ... ongoing for last ten years ... Argus people been looking for the turning point and looking for any sort of songs are indications that about turning point when coming in ... Imus with sort of bearing in mind you know it's it's ... if inflation picks up it's now up and sort of today or tomorrow or maybe the next week or next month but certainly the ... pressures will start to build over the next year or two years ... it from you know if the global economy picks up and up ... let's run through some of the reasons I wanna get to the get some good ones ... I in you really get that spanned the globe on this photo by China ... which I'm is the ... problem even in the major source of the fleet in the world or disinflation for the last ten or fifteen years so ... I'm Chinese exports you know you you talk about the China price which is up ... which is the button below or price conscious but everything that you haven't last ... twenty years now also believed that Chinese Chinese many factors are having to cope with higher ... and of wage pressures led in part that's because ... a lot of them ... migration from from the countryside to cities to the ... tothe industrial heartlands of China ... is is winding down there getting less quality labor coming through their giving less ... volume of later coming through in and out new paid the workers where they are more in order to ... to ... to keep them ... then so that you know as as hot ... as the process turns out China's chief Richard disinflation stars turn into China's inflation ... I think the will of the sort of secondary Effects Cross ... of the world am are seen as sort of similar thing in emerging markets are a ... well yes I mean emerging markets benefitted from globalization ... and from the restructuring of the last ... twenty years as well ... aam but the benefits of a restructuring and benefits of globalization or are you know that there are diminishing and as they do ... the time ... for that sort of inflationary pressures come through so you're you're starting to see a lot of these countries ... um ... lower trend growth rates but higher ... up inflationary ritzy once again bottle feed through to ... developed ... economies over the next few years Brandon tells what's going on here in the US to the U S inflation is very very loan for that ... gives the Fed a lot of the way we see happening in the US ... well ... you know as the economy recovers you'll you'll get ... a higher wage settlements dollar ask ... for one score of possibly interesting um ... Swartz of inflation might be the fact that I'm ... not because I've ... that the government pulls back a little that companies are bidding ... for ... doing their own belt tightening ... um ... or ... show us a complete profits for the best start to come under pressure ... and as they do Cup is instructive to look for ways of maintaining their margins which means ... upping prices ... you know during the recession the couple of labor ... now was the colonies in an upswing there rehiring ... but as the government spends less he knows as the stock governments to Minnesota winds down ... they're finding that the ... the big enough to look for margins from elsewhere and I'd ... imagine a school or come from up ... the raising prices ... and price price effects will start going through ... all right Allan great